YouTube Will Soon Feature Ads Within Ads

Posted by Tish Grier

The super-popular video sharing site reports that one of the first advertisers, Warner Bros Records, has planned a channel devoted to Paris Hilton's new album. One of its first advertisers, Fox Broadcasting has bought spots on the Paris Hilton Channel to promote the second season of Prison Break.

The idea that placing ads within ads "further blurs the traditional lines between entertainment and its sponsors," does not seem to be an issue with YouTube CEO and co-founder Chad Hurley: "This is a way for advertisers and brands to participate in our community, to allow them more ability to customize the look and feel for the channel, to build an audience through subscription and allow user interaction with the content they created."

Julie Supan, senior marketing director at YouTube, does not believe that young people mind the ads: "Great ads are in essence great content. We're kind of blurring the lines."

The incentive to further explore ads within ads was spurred on by the success of the ad campaign for the movie "Pulse." Deep Focus, the agency directing advertising for "Pulse," ran trailers on YouTube, but wanted another way to reach YouTube's viewing crowd. Deep Focus CEO Ian Schafer proposed running ads on YouTube's homepage for five days prior to the film's Aug. 11 release. The ads offered the trailer along with exclusive clips from "Pulse." Schafer found that audiences watched the trailer, opted to comment, and to spread the word about the film by sending the trailer to friends."For advertisers that are looking to promote their content, " he said, "this is an extremely effective way to get the word out."

While linking and sharing might spread the word on corporate-generated content, the issue remains on how to capitalize on consumer-generated content. "This gets them money in the short term," Allen Weiner, an analyst with Gartner Inc said. "It doesn't solve the bigger issue, which is monetizing consumer-created content. They're not doing that. And they're in the same boat as everybody else. It's trying to come up with mechanisms that can put the content into various buckets so that the good stuff can be parsed out and monetized."

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